Despite this very informative article in why gas sets the price for wholesale electricity costs, I still don't get it. If the cost charged is the marginal rate then does that mean we end up paying too much for the cheaper sources and who gets the money from this? open.substack.com/pub/hannahritchie/p/electricity-pricing?utm_source=share&utm_medium=android&r=1z7my0

April 11, 2026 - 10:16 UTC

3
0
4
I'd be really interested if anyone has any actual knowledge of where the money goes. Do the renewable generators get a massive pay boost every time gas is turned on? (Effectively every day) Surely this can't be the case.
3
0
0
New Zealand's wholesale pricing system for electricity generation is set by the highest price generation source needed for each 30 minute period. This is a windfall situation for the big hydro generators who dominate our grid. The system is broken.
1
0
2
Because in a system where you are only paid-what-you-bid every player is forced to guess where the final price will land, and try to bid just blow that. f you're confident that the market price of something is going to end up around £100 you'd be mad to offer to sell it for £5.
1
0
0
1/n Yes, but no. Renewables generation will get the price set by gas, but if they are on a CfD then they will pay the difference back to the government. In AR7 solar was awarded at £65/MWh, if the market price is say £40/MWh the government tops that up by £25 using a levy on your bill.
1
0
1
My suspicion (and that is all it is) is that part of incentivising investment into renewables is to make it an excessively profitable enterprise, with bill payers stumping up for infrastructure we ultimately don’t own
0
0
0
I very much suspect that the solar and wind operators are running a bonanza day every day where gas is part of the energy mix.

Electricity generators of last resort can charge anything they like; hence we should just nationalise them for the last few years that we need them
1
0
0
I'm all for nationalisation but given gas is traded on the open market (whoever owns it) we are always going to be beholden to the price of gas not the price of generating electricity via gas no matter who owns the generators. The answer surely has to be a fairer pricing system.
1
0
1